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Alan Brochstein, CFA  

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  • Apple Does Not Have $137 Billion In Cash [View article]
    As an author, Buffett Junior, it would seem that you would share your comments more thoughtfully. How do you know what everyone else knows?
    Apr 6, 2013. 04:27 PM | Likes Like |Link to Comment
  • Apple Must Totally Change Its DNA To Survive And Thrive In A Brutal Competitive Environment [View article]
    Yes, nice job, Harry! Nice to see you publishing again after a long hiatus...
    Mar 5, 2013. 10:25 AM | Likes Like |Link to Comment
  • Apple's Brand-Image Matters More Than Innovation [View article]
    Thanks for the link. The stock is very oversold as it reacts to the sharply declining estimates. The good news is that the stock is very inexpensive...
    Jan 28, 2013. 10:49 AM | 2 Likes Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    There are plenty of 3-4% name-brand tech companies out there. To invest in AAPL, one has to presume that this is a two steps forward and one back rather than the end of the growth period.
    Jan 27, 2013. 01:56 PM | 1 Like Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    Yes, AAPL is quite the ticker. It has the highest number of people signed up to receive email alerts by far.

    You raise some good points - I wasn't really trying to make the case that it's a buy necessarily, though I bet it proves to be one. I think Samir's views mirror mine, though he sure shared them more eloquently and thoroughly than I am able!

    I was responding to what I perceived as a lack of understanding regarding the plunge. Since AAPL's guidance was only for a quarter and not explicit regarding EPS, I felt that it was important to explain what was driving the decline, as many seemed to think it was unwarranted.

    Glad AVX worked out for you - I am actually more optimistic now. I wasn't expecting the last quarter to impress. Their distributor AVT bounced real nicely, and I was encouraged by the growth in bookings at AVX.
    Jan 26, 2013. 07:49 PM | 1 Like Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    The reality is that they have to do a really big acquisition to move the needle...
    Jan 26, 2013. 02:01 PM | 1 Like Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    What I mean by that is that the people or institutions who own it have it as too large a percentage of their portfolio. This can happen with big stocks in general, as there is a lot of market cap. The trouble arises when the stock goes down. In an extreme, if everyone already owns a stock, who then is the next buyer?
    Jan 26, 2013. 06:13 AM | 1 Like Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    Great points!
    Jan 25, 2013. 06:43 PM | Likes Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    No, just saying if they bought some companies that were not good buys then it would be negative (i.e. paying too much or buying a company inconsistent with the long-term goals of the company).
    Jan 25, 2013. 03:07 PM | Likes Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    Yes, that's correct, Camden. But if you want to distribute it via dividend or use it for share repurchases, it would be subject to taxation. My 10-15% haircut is based on my assumption that we will eventually get a tax-holiday to allow for repatriation. The valuation metrics I shared included 100% of cash without any adjustments. The bearish side of what you point to would be international acquisitions that don't add value.
    Jan 25, 2013. 10:33 AM | 1 Like Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    Nice facts, James, and AAPL is likely providing a good entry. But, it looks like the market's failure to pay up for the stock in terms of awarding a high PE ratio was smart. Q1 EPS were flat, Q2 EPS are projected to fall. The bottom-line is that the earnings in 2012 were a bit ahead of trend due to abnormally high profit margins, and the market sniffed it out since September.
    Jan 25, 2013. 09:58 AM | 3 Likes Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    As I suggested in the article, the consensus numbers are coming down. Not every analyst yet has updated their estimates, but it appears that it's a little better than I had suggested. I have looked at the quarterly estimates, and most of the analysts are not at the guidance implied by management of below $10 per share for the March quarter, choosing to be a bit more optimistic. It looks like it's going to settle in at something like flat for FY13, which implies growth in Q4. FY14 looks to be up perhaps slightly more than I had estimated too, perhaps 12-14% (my assumption was 10%). These numbers aren't materially different than what I had used, but they are better so I wanted to pass it along.
    Jan 25, 2013. 07:37 AM | 1 Like Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    Yes, I mentioned the put sale, and buy-write is another way to play the same concept of high volatility.
    Jan 25, 2013. 06:49 AM | 1 Like Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    See above - maybe I should have included this in the body of the article, but this explains why the estimates for FY13 and FY14 are coming down so much.
    Jan 25, 2013. 06:48 AM | 1 Like Like |Link to Comment
  • Why Apple's Plunge Makes Sense [View article]
    For those who are trying to understand the implications of the $AAPL guidance, the year ago sales were $39.2 billion, so the company is expecting to sell about 7% more. Year-ago GM was a stunning 47.4%. So, Q2-FY13 gross profits are expected to be between $15.4-16.6 billion compared to $18.56 billion a year ago (down 11-17%). OpEx a year ago was $3.18 billion, so expenses are rising dramatically (20-22.6%). Taking just the very best of these numbers and adding $350mm and taxing this at 26% leads to a best-case net income of $9.128 billion. Divide this by 939mm shares, and the EPS is $9.72, a decline of 21%.

    The bullish spin? In March, 2011, EPS was $6.40.
    Jan 25, 2013. 06:46 AM | 2 Likes Like |Link to Comment
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